The FED has Set the Market Up for Another `87 Style Crash
By: Gary Savage
GoldSeek.com
Friday, 17 July 2015
Over the past few weeks I was hoping the Fed would stay out of the market and allow a natural intermediate degree correction. Unfortunately with the Humphrey Hawkins speech this week and an FOMC meeting at the end of the month it was not to be. Instead the Fed aggressively intervened last week to prevent the market from continuing down ahead Yellens speech to Congress. This has been a familiar pattern for the last several years. Obviously it’s much easier to handle Congress if the markets are rising and everyone is happy with their 401K’s.
However, the Fed has traded some short term gain for massive pain further down the road. By not allowing the market to fully correct into an intermediate degree pullback the Fed has prevented the market from building the energy necessary for a strong breakout and rally higher. Yes the intervention made it easier for Yellen to deal with Congress, but that has come with a price. The price is that stocks will now remain in the same choppy range they’ve been in all year. And come this fall when the yearly cycle low comes due (and probably the 7 year cycle low) we are almost certainly going to experience some kind of crash event.
The Rest…HERE
